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Kanner, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year Tax Book Debit/Credit)
Kanner, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year Tax Book Debit/Credit) Debit/Credit) Assets Cash $1,000 $1,000 Accounts receivable 3,000 9,000 Buildings 850,000 850,000 Accumulated depreciation (665,000) (6:20,000) Furniture and fixtures 40,000 40,000 Accumulated depreciation (10,000) (0,000) $205,000 $272,000 Liabilities Accrued warranty expense ($40,000) Note payable (36,000) (16,000) ($16,000) ($56,000) Stockholders' Equity Paid-in capital ($50,000) ($50,000) (139,000) (166,000) Totalbes and stockholders' equity ($205,000) ($272,000) Assume a 21% federal corporate tax rate, no state or foreign taxes, and no need for a valuation allowance. The partial beginning of the year tax and book balance sheet information below. Assets Tax Debit/ Book Debit/ (Credit) (Credit) Accumulated depreciation- ($662,000) ($400,000) Accumulated depreciation-furniture & fixtures (4,400) (4,000) Accrued warranty expense ($30,000) In addition to the temporary differences, Kantner reported two permanent differences between book and taxable income. It came $7,800 in tax-exempt municipal bond interest, and reported $850 of nondeductible business meals expense. Kanner's book income before taxi $50,000. beneft r x. If required, round your answers to the nearest dollar. Pretax book income Block-tax differences/ $50,000 Lessi Tax-exempt income Nondeductible business meals Temporary differences Compute Kanther's current tax benefit or expense If required, round your answers to the nearest dollar. Pretax book income Book tax differences Permanent items Tax-exempt income Temporary differences Less Excess tax depreciation-Building Less: Excess tax depreciation-Funiture and fixtures Accrued warranty expenses Taxable income $50,000 700,000 10,000 X
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